Is this the year you plan to take that bold leap and buy a new-build house or condominium unit? Prices on new homes have gone up in recent years, and so have deposits. But there are two pieces of good news.
The first is that your deposit is protected by Tarion, the company that administers Ontario’s new home warranty program. The second is that coverage was increased and expanded in 2018 to provide buyers with even more protection.
What is deposit protection for? Deposit protection covers you in cases where your builder goes bankrupt, your builder fundamentally breaches your agreement or?you exercise a statutory right to terminate the agreement.?
Deposits on freehold homes. If the price of your new freehold home is $600,000 or less, your deposit is covered for up to $60,000.?If the price is more, you’re protected for 10 per cent of the purchase price, up to a maximum of $100,000. For example, if the price of the home you’re buying is $550,000 and you put down $50,000, your entire deposit is protected.
Deposits on condominium units. Purchasers of condominium units benefit from two levels of deposit protection. To begin with, your deposit is protected by the trust provisions of the Condominium Act. Under the act, your builder must hold your deposit money in a trust account. And if for some reason your deposit was not placed in trust, Tarion provides protection for up to $20,000.
Upgrades and extras. As a result of the new rules that took effect last year, deposit protection now covers other payments related to your new home within the above limits, such as those you make for upgrades and extras.
Knowing that the money you put down is protected provides peace of mind at the beginning of your new home buying adventure.
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